UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

ALICIA LEAKE, et al.,

Plaintiffs, v. Civil Action No. 23-3465 (JEB) ALEX GENERAL CONSTRUCTION, LLC, et al.,

Defendants.

MEMORANDUM OPINION

This is the latest installment in a home-improvement tale gone awry. More than three

years ago, Plaintiffs Alicia and Sean Leake hired Alex General Construction, LLC to renovate

their Washington, D.C., home. According to Plaintiffs, the result was a nightmare. In their

telling, AGC blew through multiple deadlines, all the while performing shoddy — and in places

dangerous — work. Pushed past their breaking point, the Leakes terminated the contract and

sued AGC. The company moved to dismiss the suit, which motion this Court denied last fall.

See ECF No. 34 (Mot. to Dismiss Op.). The Leakes then amended their Complaint in order to

add Bayron Alex Salguero as a Defendant. See ECF No. 48 (Second Am. Compl.). They allege

that Salguero is the sole owner of AGC and was the person who both misled them and decided to

cut corners on the project. They therefore seek to hold him personally liable on each of their

nine claims. See id., ¶¶ 187–353. In response, he now moves to dismiss, principally claiming

that Plaintiffs cannot pierce the corporate veil to reach him personally. See ECF No. 49 (Mot.) at

5–6. The Court disagrees, concluding that the Leakes have adequately pled that he can be held

1 liable as both a shareholder and an officer of AGC. While their allegations establishing personal

liability are not overwhelming, the claims against Salguero can proceed.

I. Background

As it must on this posture, the Court considers the facts alleged in the Second Amended

Complaint as true. See Sparrow v. United Air Lines, Inc.,

, 1113–14 (D.C. Cir.

2000).

In the fall of 2021, the Leakes consulted with AGC — represented at all times by

Salguero — about renovating their home. See Second Am. Compl., ¶ 11. Salguero did a walk-

through and told them that AGC could complete the project for $50,000 in a three-month span.

¶¶ 12–13. In December, the Leakes entered into two written agreements with AGC;

Salguero signed both on behalf of the LLC.

¶¶ 14–19. The agreements specified that AGC

would, in addition to other smaller tasks, create a laundry room, renovate the kitchen and install

new appliances, demolish several walls, open a stairwell, and paint the whole house. Id., ¶ 18.

The agreements further provided that AGC would hire an architect “to make a plan” for these

renovations. Id. Upon signing the agreements, the Leakes handed Salguero a check for $10,000.

Id.

Things soon went haywire, according to the Leakes. Although the agreements stipulated

that the project would be finished by April 2022, AGC received four extensions, each requested

orally by Salguero. Id., ¶¶ 120, 124–26. In the final extension request, Salguero assured the

Leakes that all work would be completed by August 20 — the date that they had told him they

needed to move back into their home. Id., ¶¶ 124–25. When the project was not finished by

then, the Leakes terminated their agreements with AGC. Id., ¶ 127. They were left with a

trashed and uninhabitable abode: uncovered electrical sockets and loose wiring, holes in the

2 walls, faulty plumbing, mold, paint splatter, and even standing urine in a toilet that was not part

of the renovation. Id., ¶¶ 16, 51, 55, 62–65, 128–29. By the time they terminated the contract,

the Leakes had paid AGC $39,000. Id., ¶ 117. They thereafter spent some $100,000 more

correcting the half-completed renovations. Id., ¶¶ 117, 274. All told, they were unable to live in

their home for 15 months, paying for rent and storage costs throughout that time. Id.

Plaintiffs sued AGC in D.C. Superior Court, claiming breach of contract and seeking

damages. See ECF No. 1-2 at ECF p. 2 (Compl.). After Plaintiffs amended their Complaint to

include additional damages claims, AGC removed this action to federal court on the basis of

diversity jurisdiction. See ECF No. 11 (Removal Op.). Last fall, AGC moved to partially

dismiss the case, but this Court rejected the company’s motion. See Mot. to Dismiss Op. at 1, 4–

11. Plaintiffs then sought leave to amend their Complaint a second time in order to add Salguero

as a Defendant; the Court granted that request in January of this year. See ECF No. 47 (Second

Am. Compl. Order). The Second Amended Complaint brings nine claims against both AGC and

Salguero: (I) failure to comply with D.C. licensing requirements; (II) failure to comply with a

D.C. statute requiring sellers to inform buyers of their right to cancel certain agreements; (III)

breach of contract; (IV) violation of the D.C. Consumer Protection Procedures Act; (V) breach of

the implied covenant of good faith and fair dealing; (VI) breach of warranty; (VII) negligence;

(VIII) fraud; and (IX) unjust enrichment. See Second Am. Compl., ¶¶ 187–353. Salguero now

seeks dismissal, arguing that Plaintiffs cannot hold him personally liable for any of these claims.

See ECF No. 49 (Mot.).

II. Legal Standards

Salguero’s Motion to Dismiss invokes Federal Rule of Civil Procedure 12(b)(6). In

evaluating such motions, courts must “treat the complaint’s factual allegations as true . . . and

3 must grant plaintiff the benefit of all inferences that can be derived from the facts alleged.”

Sparrow,

(quotation marks omitted). Although “detailed factual allegations”

are not necessary to withstand a Rule 12(b)(6) motion, Bell Atlantic Corp. v. Twombly,

(2007), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a

claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,

(2009)

(quoting Twombly,

). That is, the facts alleged in the complaint “must be enough

to raise a right to relief above the speculative level.” Twombly,

. “Threadbare

recitals of the elements of a cause of action, supported by mere conclusory statements,” are

therefore insufficient to withstand a motion to dismiss. Iqbal,

.

The court need not accept as true “a legal conclusion couched as a factual allegation,”

Trudeau v. FTC,

(D.C. Cir. 2006) (quoting Papasan v. Allain,

(1986)), nor “inferences . . . unsupported by the facts set out in the complaint.”

(quoting

Kowal v. MCI Commc’ns Corp.,

(D.C. Cir. 1994)). And it may consider not

only “the facts alleged in the complaint” but also “matters of which [courts] may take judicial

notice.” Equal Emp. Opportunity Comm’n v. St. Francis Xavier Parochial Sch.,

(D.C. Cir. 1997).

III. Analysis

Although they are muddled in the parties’ briefing, Salguero’s Motion to Dismiss raises

three distinct questions relating to whether he can be held personally liable: (a) can any claims

proceed against him as a shareholder of AGC; (b) can the tort claims proceed against him as an

officer of AGC; and (c) can the D.C. Consumer Protection Procedures Act (CPPA) claims

proceed directly against him? Although the first is a closer question than the others, the Court

answers each in the affirmative.

4 A. Shareholder Liability (Veil Piercing)

It is a “basic tenet of American corporate law . . . that the corporation and its shareholders

are distinct entities.” Dole Food Co. v. Patrickson,

(2003). In certain

circumstances, however, the “veil separating corporations and their shareholders may be

pierced,”

, allowing “the shareholder [to be] held liable for the corporation’s conduct.”

United States v. Bestfoods,

(1998). Salguero, who is allegedly AGC’s sole

beneficial owner, see Second Am. Compl., ¶ 4, objects that Plaintiffs have fallen short of

demonstrating that this is such a circumstance.

Before analyzing whether the corporate veil can be pierced here, the Court must first

determine whether D.C. or Maryland law governs that analysis — an issue entirely unaddressed

by the parties, both of whom assume that D.C. law applies. While the central events in this case

(i.e., the contract negotiations and home-renovation work) took place in the District, AGC and

Salguero are associated with Maryland addresses. See Second Am. Compl., ¶¶ 2–4. Indeed,

Salguero attaches paperwork to his Motion listing a Maryland address for AGC, albeit one that is

different from that offered by Plaintiffs. See ECF No. 49-1 (Exh. 1) at 1. The Court can at this

juncture take judicial notice of this confirmatory evidence that AGC is registered in Maryland, as

the exact address within Maryland is not relevant to the choice-of-law analysis. See Spence v.

U.S. Dep’t of Veterans Affs.,

, 539 n.2 (D.C. Cir. 2024) (courts may “take judicial

notice only of a fact that is not subject to reasonable dispute”) (quotation marks omitted).

In a diversity-jurisdiction case, a court typically “applies the choice of law rules of the

forum state (or district or territory),” Nationwide Mut. Ins. Co. v. Richardson,

(D.C. Cir. 2001) (quotation marks omitted), and that remains true for veil-piercing cases. TAC–

Critical Sys., Inc. v. Integrated Facility Sys., Inc.,

, 64–65 (D.D.C. 2011)

5 (rejecting contrary view); accord B & H Nat. Place, Inc. v. Beresford,

(D.D.C. 2012). The Court must therefore apply the District of Columbia’s choice-of-law rules to

determine whether its veil-piercing laws or those of Maryland control. See TAC-Critical,

.

Those rules require that a court “evaluate the governmental policies underlying the

conflicting laws and determine which jurisdiction’s policies would be most advanced by having

its law applied to the facts of the case under review.”

(cleaned up) (quoting Hartley v.

Dombrowski,

(D.D.C. 2010)). When applying that test in a contract

case such as this, a court considers the place(s) where the contracting, contract negotiation, and

contract performance occurred as well as the location of the parties’ incorporation and place of

business.

(citing Turkmani v. Republic of Bolivia,

(D.D.C. 2002)). In

light of those factors, D.C. law applies. Not only was the contract negotiated and signed in the

District, but it is where the performance — and alleged breach — occurred. And the jurisdiction

“where the defendant’s alleged conduct occurred has the dominant interest in regulating it.”

TAC-Critical,

(quoting Bledsoe v. Crowley,

(D.C. Cir.

1988)) (cleaned up).

With that foundation laid, we turn to the question of whether under D.C. law Salguero

can be held liable as a shareholder of AGC. The Leakes allege that he is the “alter ego” the

entity. See Second Am. Compl., ¶¶ 4, 5, 78, 213, 318. Such a theory holds (in the reverse of

Plaintiffs’ formulation) that in certain circumstances a corporate entity is merely the “business

conduit” of a single person. See 1 William Meade Fletcher et al., Fletcher Cyclopedia of the

Law of Corporations, § 41.10 (Perm. ed., Sept. 2024 Update); Labadie Coal Co. v. Black,

(D.C. Cir. 1982). When it applies, the theory permits “cast[ing] aside the corporate

6 shield and fasten[ing] liability on the individual shareholder.” Est. of Raleigh v. Mitchell,

(D.C. 2008) (quoting precursor version of Fletcher, supra, § 41.35). Alter-ego

liability arises when — in addition to factors to be described shortly — “substantial ownership”

of a corporate entity “is concentrated in one person or a few persons.” Id. An allegation resting

on the alter-ego theory, moreover, “is not in itself a claim for substantive relief.” Fletcher,

supra, § 41.10. Rather, it is an attempt to extend liability on an underlying claim, thereby

reaching an “individual upon a cause of action that otherwise would have existed only against

the . . . corporation.” Id.; see TAC-Critical,

.

Pursuing the alter-ego theory, as just noted, involves piercing the corporate veil. Est. of

Raleigh,

. In the District, a party is permitted to do so “upon proof that there is

(1) unity of ownership and interest, and (2) use of the corporate form to perpetrate fraud or

wrong, or other considerations of justice and equity justify it.”

(quotation marks omitted); see

Bingham v. Goldberg. Marchesano. Kohlman. Inc.,

(D.C. 1994). To determine

whether these two elements have been met, courts “consider a range of factors, including

whether corporate formalities have been observed; whether there has been any commingling of

corporate and shareholder funds, staff, and property; whether a single shareholder dominates the

corporation; [and] whether the corporation is adequately capitalized.” Meshel v. Ohev Sholom

Talmud Torah,

(D.C. 2005); see Est. of Raleigh, 947 A.2d at 470–71;

Bingham,

; Vuitch v. Furr,

(D.C. 1984). The “factor which

predominates will vary in each case,” and there is no “uniform standard to determine whether the

evidence has sufficiently demonstrated unity of interest and ownership.” Vuitch,

. “Because piercing the corporate veil is a doctrine of equity,” deciding whether to do so is

necessarily “influenced by considerations of who should bear the risk of loss and what degree of

7 legitimacy exists for those claiming the limited liability protection of a corporation.”

at 815–

16; see United States v. Andrews,

(D.C. Cir. 1998) (“The ultimate principle

[of veil piercing] is one permitting its use to avoid injustice.”).

Despite the prolixity of Plaintiffs’ Second Amended Complaint, and although they

amended it specifically to add Salguero as a Defendant, the allegations supporting their alter-ego

theory are rather thin — and in places inconsistent. Even so, accepting the Complaint’s factual

assertions as true and granting Plaintiffs the benefit of all inferences that can reasonably be

drawn from those facts, see Hettinga v. United States,

(D.C. Cir. 2012), the

Court concludes that they have met their burden — if only barely.

Start with the first prong. Unity of ownership and interest can “be demonstrated by

showing domination and control of a corporation,” including “in a closely held corporation.”

Vuitch,

. Plaintiffs allege several facts to show that Salguero completely

dominated and controlled AGC. He is the sole beneficial owner of the company and “at every

stage” was the only person “acting on AGC’s behalf.” Second Am. Compl., ¶¶ 4–5. He

endorsed each check that Plaintiffs provided to AGC, id., ¶ 4, and throughout the monthslong

renovation process was the sole face of — and their sole point of contact with — AGC. See,

e.g., id., ¶¶ 15, 37, 39, 52–53, 77. Although not extensive, these allegations are sufficient: when

one person “alone holds the reins of [a corporate entity’s] activities,” and it is “by his actions

alone that a relationship with [a] plaintiff was established and business transacted,” then “there is

an increased justification . . . to disregard the corporate entity.” Labadie,

(applying federal common law); Camacho v. 1440 Rhode Island Ave. Corp.,

(D.C. 1993) (citing Labadie for veil-piercing law); Lawlor v. Dist. of Columbia,

,

8 975 (D.C. 2000) (same). It is reasonable, in other words, to infer that AGC was merely the

“business conduit” of one person — Salguero. Labadie,

.

Plaintiffs attempt to reinforce that conclusion by alleging that AGC and Salguero share

the same address. Were that true, it could be a weight-bearing allegation. In closely held

corporations, commingling assets or treating corporate assets as one’s own can support an alter-

ego theory. See Fletcher, supra, §§ 41.50, 41.72. Except the Complaint is inconsistent on this

point: in one part, the Leakes allege that the “address of AGC and [Salguero’s] home address is

the same,” Second Am. Compl., ¶ 214; see Opp. at 11, but in an earlier section of the Complaint,

they provide different street addresses for AGC’s “principal place of business” and Salguero’s

residence. See Second Am. Compl., ¶¶ 3–4. The Court therefore cannot conclude that this

allegation supports piercing the veil.

Plaintiffs muster a relatively stronger case on the second prong, which asks whether

recognizing corporate separateness would “sanction a fraud or promote injustice.” Vuitch,

(quotation marks omitted). They first allege that Salguero used the existence of

AGC to mislead them. As they tell it, he consistently “misrepresented his status and authority”

vis-à-vis AGC. See Opp. at 10. When executing the agreement, instead of signing on the line

provided for the contractor (here, AGC), he signed beneath it. See Second Am. Compl., ¶ 144.

In doing so, they say, he meant to conceal the fact that he was the contractor — i.e., the

company’s owner. Id., ¶¶ 144, 254. Later, when parrying their complaints, he “routinely” told

them he had a “boss,” thereby implying that he was a mere employee of the company that he in

fact owned. See id., ¶¶ 77–78, 144, 254; Opp. at 10. Although Plaintiffs could have better

spelled it out, these allegations arguably indicate that Salguero hid behind his LLC in order to

9 obscure, misdirect, and delay, thereby using “the corporate form to perpetrate” the alleged

“wrong[s].” Est. of Raleigh,

(quoting Bingham,

).

More important is the allegation that AGC was undercapitalized. While inadequate

capitalization can also be relevant to the first prong, see Fletcher, supra, § 41.33 (noting it can

“be a major consideration in deciding whether a legitimate separate corporate entity was

maintained”), an entity’s “insolvency or undercapitalization is often an important” means of

demonstrating that “use of the corporate form [would] promote injustice or wrong.” Vuitch,

. That is, it is an abuse of the corporate form for an entity to be so chronically

undercapitalized that it is unable to satisfy its debts or a judgment against it. See id.; Fletcher,

supra, § 41.33. As evidence that AGC was fatally undercapitalized, the Leakes allege that

Salguero used the money they paid him to fund other projects. See Second Am. Compl., ¶ 319.

Specifically, they claim that he demanded an additional $10,000 payment in order to complete

the kitchen even though they had already paid for that portion of the project, and that he did so in

order to finance other clients’ renovations. Id., ¶ 338. Salguero does not dispute that — if true

— such fact demonstrates an inadequate level of capitalization for a home-renovation company.

See Labadie,

(“Whether capitalization is adequate is . . . a function of the type of

business in which the corporation engages.”); Francis O. Day Co. v. Shapiro,

(D.C. Cir. 1959) (same). AGC’s alleged undercapitalization and Salguero’s reliance on the

entity to perpetrate the alleged wrongs thus together satisfy the second prong of the veil-piercing

test.

Although perhaps not finely crafted, the Second Amended Complaint adequately alleges

that AGC “is not only controlled by [Salguero], but also that the separateness of [Salguero] and

the corporation has ceased and an adherence to the fiction of the separate existence of the

10 corporation would sanction a fraud or promote injustice.” Camacho,

(cleaned

up). So, at least for now, the Leakes’ claims can proceed directly against Salguero qua

shareholder of AGC. At summary judgment or trial, he remains free to dislodge that conclusion

with evidence of his own.

B. Officer Liability

Salguero also appears to object that none of the Leakes’ tort claims can proceed directly

against him based upon his conduct while acting as an officer of AGC. He contends that he can

be held liable only for tortious conduct taken “in a personal capacity outside the scope of his role

as AGC’s owner and agent,” but not for any “any misrepresentations” or “wrongful conduct” he

undertook when acting as an officer of the company. See Mot. at 6–7; ECF No. 51 (Reply) at 5.

He is mistaken.

As an initial matter, Salguero overlooks that “the legal principles governing the liability

of corporate officers for their own tortious acts differ from those applicable to shareholder

liability in veil-piercing cases.” Lawlor,

; see Reply at 4–5. Under D.C. law,

“corporate officers are not shielded by the limited liability of the corporation for liability for their

own tortious acts. They are individually liable for the torts which they commit, participate in, or

inspire, even though the acts are performed in the name of the corporation.” Camacho,

(quotation marks omitted). “Sufficient participation can exist when there is an act or

omission by the officer which logically leads to the inference that he had a share in the wrongful

acts of the corporation which constitute the offense.” Lawlor,

(quotation marks

omitted).

The Leakes amply allege that Salguero committed torts or participated in those of AGC.

They claim that he was the person who deceived them, defrauded them, and decided that AGC

11 would do inferior or unsafe work. They allege, for instance, that he was the one who misled

them during the contract formation, id., ¶¶ 13, 15, 205, 207, 321–25; decided to hire unlicensed

subcontractors and workers, id., ¶¶ 45, 193, 223, 225, 273, 283, 293; illegally obtained an

electrical license in the name of another person, id., ¶¶ 42–46, 88, 95–98, 331–33; fraudulently

demanded and accepted installment payments, id., ¶ 319; knew that he “had neither the expertise

nor man power to complete the project” on time, id., ¶ 258; misrepresented the reasons for the

project delays, id., ¶ 244; and refused to refund the $39,000 already paid by the Leakes. Id.,

¶¶ 257, 350, 353. Rather than a mere “share in the wrongful acts” of AGC, in other words, he

“dominated [the] decision-making” that led to them. Lawlor,

(emphasis

added). Indeed, here as elsewhere, the dominating “conduct” that permits “impos[ing] personal

liability on [Salguero] as a corporate shareholder also warrant[s] imposition of liability as a

corporate officer”: he “used his authority to engineer the actions” that give rise to this suit.

; see McWilliams Ballard, Inc. v. Broadway Mgmt. Co.,

(D.D.C.

2009).

The Leakes therefore adequately allege that Salguero is personally liable for torts he

committed or participated in when acting in his capacity as an officer of AGC. That they were

“performed in the name of the corporation will not absolve [him] from liability.” Lawlor,

(quotation marks omitted).

C. D.C. Consumer Protection Procedures Act

Finally, Salguero argues that he cannot be held personally liable under the CPPA. This

contention can be dealt with swiftly. Seeking to resurrect and refurbish the argument just

leveled, he claims that he can be held liable under the CPPA only for acts taken in his individual

capacity “independent of AGC’s business activities,” not those he performed as owner or officer

12 of AGC. See Mot. at 7; see also Reply at 6. But the sole case he cites as support — Hume v.

Watson,

(D.D.C. 2010); see Reply at 6 — stands for essentially the opposite

proposition.

In Hume, a plaintiff brought one of the same claims as the Leakes. See

(claiming violation of

(dd)); Second Am. Compl., ¶¶ 231, 239–40

(same). Such a claim lies if there was a home-improvement contract for a residential property

for at least $300; if, “under the contract, defendants required or accepted payment in advance of

the full completion of all work required to be performed under the contract”; and if the

“defendants were not licensed in the District of Columbia as home improvement contractors.”

Hume,

(cleaned up); see

(dd); 16 DCMR §§ 800.1,

899.1. The defendant in Hume was an individual who, on behalf of his employer (a company),

contracted with the plaintiff and accepted payment for the home-improvement work even though

neither he nor the company held the proper licenses. See

. He objected that

even if the company were liable, he was not individually so.

. The court rejected that

contention, observing that the D.C. regulation undergirding the claim provides that “[n]o person

shall require or accept any payment for a home improvement contract.”

(cleaned up)

(quoting 16 DCMR § 800.1).

This Court therefore sees nothing in Hume to suggest that Salguero is across-the-board

not liable under the CPPA for his actions if they were on behalf of AGC or part of its business

activities. Indeed, here, as in Hume, Plaintiffs allege that Salguero was the person who engaged

in the contract formation and requested payments in violation of the CPPA. See Second Am.

Compl., ¶¶ 237, 239. As a result, contrary to what he appears to argue, see Mot. at 6, he can be

13 liable for certain CPPA claims even if he only misrepresented AGC’s licensure as opposed to his

own.

IV. Conclusion

For the foregoing reasons, the Court will deny Salguero’s Motion to Dismiss. A separate

Order so stating will issue this day.

/s/ James E. Boasberg JAMES E. BOASBERG Chief Judge

Date: May 8, 2025

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